The Legality of Co-pay cards: It’s no secret co-pay cards are a contentious issue; now, they’ve been taken to the courts. Last week, the consumer advocacy group, Community Catalyst, filed suit against 8 drug companies seeking to ban the use of co-pay cards on behalf of unions that provide drug benefits for civilian and uniformed municipal workers in New York City, carpenters in New England, and plumbers in various states. Among the drug companies specifically named in the lawsuit: Pfizer, which set off the most recent conflagration when it launched its $4 co-pay card for branded Lipitor after the drug’s patent expired this past November. In its suit, Community Catalyst argues that co-pay cards are an illegal inducement “designed to undermine cost-sharing arrangements.” In effect, the existence of co-pay cards provides patients with a financial disincentive to use cheaper medicines, while the majority of the bill is still paid for by insurers or pharmacy benefit managers. Community Catalyst’s arguments echo those made by the Pharmaceutical Care Management Agency in a November report estimating that co-pay cards will increase prescription drug costs by $32 billion over the next decade. Meanwhile, proponents of the practice note that co-pay cards don’t just make things economically feasible for patients; often spending less out-of-pocket for medications leads to better patient outcomes because of improved medical adherence. Moreover, the prevalence of co-pay cards has skyrocketed: according to a December 2011 report by the stock research firm Cleveland Research, the number of drug coupon programs in operation has ballooned from 86 in 2009 to 362 in 2011. Even with these stats, it’ll be interesting to see how the courts swing. Both Medicare and the state of Massachusetts have deemed the practice a kick-back and thus illegal; whether their decisions will be viewed as setting a legal precedent remains to be seen.
Prime Time for MS Risk-Sharing Deal: Just as Real Endpoints begins to wonder about the fate of pharma-payer risk-sharing deals, signs are the trend is at least alive. Last week, EMD Serono inked an outcomes-based contract with pharmacy benefit manager Prime Therapeutics for the multiple sclerosis (MS) drug, Rebif. Those familiar with the risk-share agreement Cigna brokered with Merck for Januvia/Janumet in 2009 will see similarities; by including a patient outcomes metric, the new alliance is a spin on traditional rebate contracts, which are usually brokered on the volume of drug purchased. As part of the contract, Serono will owe Prime rebates under the following circumstances: first, if plans must pay higher total costs for patients taking Rebif versus patients taking a different MS drug; second, if the medical adherence to Rebif remains above a specified level. The latter case brings specific attention to patient adherence, which according to Serono will help reduce hospitalization and emergency visits to a minimum, maximizing cost effectiveness for Prime and the payers who’ve contracted with them. At its core, the new CareCentered contract benefits Serono by helping build Rebif’s market share in a market currently dominated by Teva’s Copaxone. While it may seem counter-intuitive for Serono to pay a bigger rebate if patients are in compliance, the reality is greater patient adherence means patients are staying on the drug longer and thus more scripts for Rebif get written. That in turn leads to greater revenues; under that scenario, paying a bigger rebate is a small price for increased market share in a competitive drug class. Prime, meantime, is making a name for itself as a leader in risk-sharing deals stateside: the Serono contract marks its third, on top of agreements in diabetes and osteoporosis.
Blinds are off – Move over Provenge: Last week, Johnson & Johnson’s Janssen research unit unblinded a clinical trial of Zytiga + prednisone, demonstrating the oral oncologic’s efficacy in patients with prostate cancer who have not yet received chemotherapy. Upon reviewing the data during a routine interim analysis, Zytiga’s independent monitoring committee concluded the results were so compelling that it would be unethical to have patients continue on the placebo arm of the randomized, double-blind trial. J&J hasn’t actually revealed the data – the two primary endpoints are progression-free survival and overall survival. The plan is to present those data at an upcoming medical meeting (ASCO?) and in a peer-reviewed journal publication. J&J is currently filing for FDA approval to expand Zytiga’s label; if granted, Zytiga would be eligible to treat both pre- and post-chemotherapy prostate cancer patients, potentially doubling the drug’s market according to Bernstein Research analysts. The news was a definite blow to Dendreon, which markets the more expensive cancer vaccine, Provenge, currently approved to treat prostate cancer in pre-chemo stetting. Despite prolonged survival for four months, Provenge hasn’t been widely adopted– not because payers are denying coverage, but because providers are wary of taking on the financial risks associated with its high price tag in an uncertain reimbursement environment. The news of Zytiga’s success also has reimbursement and pricing implications for Medivation, which has a competing drug in late-stage clinical trials and released its strong clinical data at the recent Genitourinary Cancers symposium in San Francisco.
- Read corresponding articles from Bloomberg News, the WSJ [$$ needed] and the NYT.
- Read Johnson & Johnson’s announcement here.
Personalized Oncology Therapy—it’s one step forward, two steps back: It’s common wisdom to assume genetic tests will drive down costs associated with healthcare by helping physicians target the right drug to the right patient. Two different stories this week remind us that it’s hardly that simple. There’s growing evidence that diagnostics are now a big enough budget item that payers must begin to make coverage decisions about which tests actually make a difference in guiding clinical practice. In a paper released in conjunction with a March 12 meeting on gene testing, UnitedHealth Group forecast the diagnostic market could swell to $25 billion in 10 years. Trouble is, the actual effectiveness of many of these tests hasn’t been rigorously studied; in the words of United, that scenario “pose[s] significant challenges to a system that is increasingly unaffordable.” United’s status as a large, national insurer is just one reason it’s worth paying attention to the payer’s position. According to Bloomberg, the organization, which covers 36 million people, spent half a billion dollars on molecular diagnostics (primarily related to cancer and HIV) in 2010 alone. But the challenge isn’t just figuring out how to pay for these tests. A study published in the New England Journal of Medicine last week shows just how complicated it can be to determine clinical utility. When scientists from the Cancer Research UK London Research Institute examined the genetic make-up of tumors, they discovered the tumor’s molecular signature differed significantly depending on which part of the lesion the scientists biopsied. In other words, the genetic make-up of a single tumor was highly heterogeneous. Some have posited this heterogeneity data will bring personalized medicine, still in its infancy, to a halt; if scientists can’t easily determine via a simple biopsy the relevant genetic markers required to make a treatment decision, what’s the relevance of those high-priced molecular tests? That’s an overly negative view; but the road is likely to be longer and more expensive (something that will give payers pause.)